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Responding to criticism from the patent community, the U.S. Patent and Trademark Office has revised its proposed strategic plan to revamp the patent system. Under the new proposal, examiners would still lose their historic job of searching for prior art related to patent applications. As PTO Director James Rogan proposed in June, that task is to go to private outside contractors. But the PTO now plans to send applications to contractors rather than having the applicants do so themselves. The revised proposal also reduces some of the huge application fees included in the original proposal and would no longer allow applicants to defer examinations for 18 months. Jon Dudas, PTO’s deputy director, announced the proposed revisions to the agency’s “21st century strategic plan” at a meeting of the Intellectual Property Owners Association in early December. Other officials in the Bush administration must sign off on the proposal before it is finalized. “We’re considering these changes,” says Brigid Quinn, a PTO spokeswoman. “It’s definitely not a done deal.” The original set of changes came in for criticism from some members of Congress as well as from major IP organizations. In October, the American Intellectual Property Law Association, the Intellectual Property Owners Association and the International Trademark Association sent a joint letter to the director of the Office of Management and Budget that outlined their opposition. Among other things, they objected to permitting patent applicants to defer the examination of their patents, requiring applicants to select a contractor to perform an initial prior art search, and the imposition of certain application surcharges. Under the agency’s revised plan, rather than deferring examinations, the PTO would allow applicants to abandon their applications before the examination is completed and get a partial–fee refund. As for the proposed application fees, the PTO is dropping so–called punitive fees that were intended to dissuade applicants from certain activities, such as filing applications with excessive claims or dividing a large application into smaller applications with fewer than 20 claims. The new fee structure is not yet available. Because of the fee changes, Quinn says the agency would get about $400 million less and require more time to issue a patent. As a result, she says, the agency is considering issuing an advisory opinion 18 months after an application is filed to let the applicant know the likelihood that a patent will be issued. The three major patent groups that wrote to the federal budget office last fall have endorsed the PTO’s revised plan. However, they have tied their support to eliminating the diversion of PTO revenue to other government agencies. “Our support is based upon the assumption that the Bush administration will effectively address the issue of diversion,” the groups wrote in a joint letter delivered shortly before Thanksgiving. “Our members will insist that we strongly oppose any proposed fee increase that does not include an appropriate solution to diversion.” Michael Kirk, executive director of the American Intellectual Property Law Association, says the IP groups have not yet seen the fee proposal, but were expecting it to become available in late January or early February as part of the president’s budget or as a separate legislative proposal. Former PTO Director Q. Todd Dickinson, who is now a partner at Howrey Simon Arnold & White, says the big question is whether rank–and–file members of the IP groups will support the revised plan. “The administration needs to send a strong signal about their commitment to ending diversion,” says Dickinson. While the IP groups have been appeased by the PTO, examiners are still opposed to the outsourcing of prior art searches. Ronald Stern, president of the Patent Office Professional Association, the union that represents examiners, says the tasks of a prior art search and examining an application are intertwined. Separating these duties, he says, will lead to added costs and a repetition of tasks.

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